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Keeping supply chain in check: The need for proper auditing

Posted: 20 Feb 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Achilles? supply chain? bribery? corruption policy? IFF?

For the most part, supply chain professionals generally have a lot on their plate. Aside from making inquiries about quality standards and IP data protection, they also seek for manufacturing process certifications, contract review requirements, document control measures, and source of origin of parts and raw materials. Tasking as it is, performing these audits doesn't mean that the professional has gotten all the bases covered. And this is where another crucial element could result in problematic consequences.

Amid all these, unfortunately, they may not be asking how suppliers deal with bribes and corruption issues, according to a recent report from Achilles, a global supplier information management company.

Globally, about a third of large companies surveyed said they issue tenders or contracts without having an anti-bribery and corruption policy for their main suppliers, noted Achilles. The study, which was commissioned by Achilles and conducted by independent research company IFF, was based on interviews with 300 supply chain professionals from oil, gas, mining, construction, power and utilities, and manufacturing businesses across Brazil, Canada, the Nordics, Spain, the UK and the United States.

Anti-bribery and corruption policies oversight

The study also revealed that a third of companies polled said they do not conduct basic checks to validate suppliers' health and safety or financial reports. In addition, half of the polled businesses claimed that they do not check suppliers' anti-bribery and corruption policies. Likewise, about one in five large businesses said that they did not conduct any on-site supplier visits to check if the contractors do what they say they do in their health and safety, anti-bribery and corruption and financial documents.

Despite the fact that the theft, fraud and corruption combo is listed as a top-ten global business risk for 2015 on the latest Allianz Risk Barometer and the amount of money spent annually on managing supplier information, many companies, at least in the Achilles sampling, may lack essential systems or resources to track and update this type of data. Some of gaps may also be because companies tend to put greater trust in the suppliers they most frequently use and may not question their anti-corruption policies, the firm added.

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